Recording Entries for Impairment-AFS Determine the amount of impairment loss (if any) to record in income under the following three separate scenarios for an AFS debt investment. In all three cases, the company does not intend to sell and does not believe it is more likely than not that it will be required to sell the investment before recovery of any unrealized loss. Assume that the company has already adjusted the AFS investments to fair value through OCI. Scenario Fair value Amortized cost 1 2 3 162,000126,000108,000 144,000144,000144,000 Expected credit loss27,000 27,000 27,000 ??? Impairment loss ??? ???

Recording Entries for Impairment-AFS Determine the amount of impairment loss (if any) to record in income under the following three separate scenarios for an AFS debt investment. In all three cases, the company does not intend to sell and does not believe it is more likely than not that it will be required to sell the investment before recovery of any unrealized loss. Assume that the company has already adjusted the AFS investments to fair value through OCI. Scenario Fair value Amortized cost 1 2 3 162,000126,000108,000 144,000144,000144,000 Expected credit loss27,000 27,000 27,000 ??? Impairment loss ??? ???

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Recording Entries for Impairment-AFS
Determine the amount of impairment loss (if
any) to record in income under the following
three separate scenarios for an AFS debt
investment. In all three cases, the company
does not intend to sell and does not believe it
is more likely than not that it will be required
to sell the investment before recovery
unrealized loss. Assume that the company has
already adjusted the AFS investments to fair
value through OCI.
Scenario
of
any
1
2
3
Fair value
162,000126,000108,000
144,000144,000144,000
Expected credit loss27,000 27,000 27,000
???
Amortized cost
Impairment loss
???
???

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